First Gen readies $1-b LNG terminal project B3
Business
Ray S. Eñano, Editor Roderick T. dela Cruz, Assistant Editor business@manilastandardtoday.com extrastory2000@gmail.com FRIDAY, OCTOBER 14, 2016
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Foreign funds withdraw $807m By Julito G. Rada
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OREIGN fund managers withdrew $807 million from the local financial market in September, the biggest net outflow in 32 months, on expected interest rate hike in the US.
Data from Bangko Sentral ng Pilipinas showed foreign portfolio investments or “hot money” posted a net outflow of $807 million in September, excluding the withdrawals in the first two weeks of October. The September net outflow was also higher than the $323.98-million net outflow registered a year ago and a reversal of the $427-million net inflow in August this year. It was also the biggest net outflow since January 2014 when fund managers pulled out $1.8 billion. Foreign withdrawals led to the decline of the Philippine Stock Exchange index to a four-month low of 7,312.18 Thursday. The peso also fell to a seven year low of 48.54 against the US dollar Wednesday, before rebounding to 48.34 Thursday. Bangko Sentral Governor Amando Tetangco Jr. said Thursday a clearer guidance from the US Federal Reserve on the timing of its highly-anticipated interest rates hike was expected to calm rough trading in currency markets. Tetangco issued the statement in reaction to the minutes of the Fed meeting held last month and was released Wednesday. “The minutes as I understand it did not say anything new, i.e. , nothing unexpected or different from what market had “read” from the actual statement,” Tetangco said in a text message. He said the division within the Fed was already spoken of even on statement date, adding the market would continue to closely monitor other Fed members who were speaking. “We may see some clearer guidance from [Fed] chair [Janet] Yellen who is expected to speak on Friday. Hopefully, till then, regional currencies including the peso will trade within narrower bands,” Tetangco said. Minutes of the meeting conducted Sept. 20 to 21 in Washington said that “several members judged that it would be appropriate to increase the target range for the federal funds rate relatively soon if economic developments unfolded about as the committee expected.” The Federal Open Market Committee left the benchmark lending rate unchanged from 0.25 percent to 0.5 percent for the sixth straight meeting in September. But most of the 17 participants projected at least one hike before the year ends. Data showed despite the outflow in September, hot money posted a net inflow of $1.27 billion in the first nine months, a reversal of the $413.93-billion net outflow in the same period last year. Total inflows in September reached $1.27 billion, lower than $1.367 billion a year ago, while total outflows widened to $2.08 billion from $1.69 billion. Bangko Sentral said among the reasons that caused the outflows in September were the bombing in Davao City early last month that prompted the government to declare a state of lawless violence in the country and the European Central Bank’s decision to discontinue its bond-buying program.
SC rules in favor of Aboitiz on Naga plant FastCat plans to add By Alena Mae S. Flores THE Supreme Court upheld a decision that nullified the awarding of the 153.1-megawatt Naga power plant complex in Cebu to SPC Power Corp. and effectively recognized a unit of Aboitiz Power Corp. as the right winner for submitting the highest bid in 2014. Aboitiz Power said in a disclosure to the stock exchange wholly-owned subsidiary Therma Power Visayas Inc. received on Thursday the notice of judgement dated Oct. 5 from the Supreme Court in case number G.R. No. 212686 entitled “Sergio R. Osmena III vs. PSALM, Emmanuel R. Ledesma Jr., SPC Power Corp. and Therma Power.” Aboitiz said while the high tribunal upheld the viability of public bidding held by Power Sector Assets and Liabilities Management Corp. in 2014, it invalidated the “right to top” provision. PSALM earlier awarded the
power plant complex to SPC Power Corp., because of the “right to top” provision in the agreement. The complex consists of the 52.5-megawatt Cebu 1 and 56.8-MW Cebu 2 coalfired thermal power plants, and the 43.8-MW Cebu diesel power plant 1 composed of six 7.3MW bunker-C fed power units. Therma Power Visayas emerged as the highest bidder with an offer of P1.09 billion in 2014, beating the P859-million offer of SPC Power, which was the existing operator then. PSALM allowed SPC to exercise its right to top the offer of Aboitiz Power. Senator Sergio Osmeña III filed a case with the SC in 2014 seeking to stop the sale of the Naga power plant complex in Cebu to SPC Power and nullify the stipulation in the lease agreement. The Supreme Court voided the PSALM-SPC lease agreement in January 2016 and upheld the decision this month.
“In its notice of judgement, the Supreme Court upheld the validity of the public bidding held by the PSALM Corp. of the Naga power plant but invalidated the condition in the bidding granting SPC the right to top the bid,” Aboitiz Power said. “The Supreme Court annulled and set aside the asset purchase agreement and the land lease agreement executed between SPC and PSALM and directed PSALM to execute the NPPCAPA and the NPPC-LLA in favor of TPVI,” it said. PSALM officer-in-charge Lourdes Alzona confirmed the agency received a copy of the Supreme Court decision. “We are reviewing it and will refer to DOE,” Alzona said. Energy Department undersecretary Felix William Fuentebella said PSALM “will implement said decision accordingly.” “We asked them to furnish Secretary [Alfonso] Cusi a detailed presentation on the background of the case and how to
proceed,” Fuentebella said. SPC senior vice-president for finance and administration Alfredo Ballesteros earlier said a “no rebid” scenario for the Naga complex would be disadvantageous to the government. “Merely awarding the plant to what is now the lower bidder would be disadvantageous to government. This is changing the rules of the game. All the interested parties to the bid were aware of the right to top, as a condition on the Naga sale. By participating in the bid, they recognized SPC’s right to top and cannot assert their right to win,” Ballesteros said. “Of course we will comply with the final decision of the court. But a no rebid scenario for the government would change the rules of the game. I’m sure all bidders for Naga considered the right to top in their bids, because the right was the primary condition in the bidding. It cannot simply be deleted,” Ballesteros said.
Asean RoRo services
By Darwin G. Amojelar ARCHIPELAGO Philippine Ferries Corp., operator of FastCat roll-on/roll-off ferries, said Thursday it plans to expand operations to Malaysia and Indonesia by late next year. “Initially, these are the two countries that are very close to the Philippines. Our goal is to connect these two gateways,” AFPC chairman Christopher Pastrana said in a news briefing at Sofitel Philippine Plaza Hotel in Manila. Pastrana said the company aimed to start the Palawan to Kudat in Sabah, Malaysia route by late 2017. “I think if we open these two gateways, there’s no stopping us to opening up other gateways. They are talking about Thailand, Singapore and Vietnam,” he said. Pastrana said the company would deploy two vessels for its Malaysian and Indonesian operations. At present, AFPC has 10 Catamaran vessels. “But our goal is to have 30
ships, initially all over the Philippines. So that we will be able to connect about 11 million passengers, which is less than 15 percent of the total riding public using sea lanes as main mode of transportation and move about 12 million to 15 million tons of cargoes which is still not even 15 percent of the 110 million tons of cargoes moving in and out of the entire Philippines,” Pastrana said. Pastrana said the company would acquire 20 Catamaran vessels for $8.3 million to $11 million each. “The total is about $120 million to $160 million. That’s a substantial amount of investment by 2020,” he said. FastCat current routes include Batangas to Clapan, Mindoro; Bulalacao, Mindoro-Caticlan, Aklan; Matnog, Sorsogon-San Isidro, Northern Samar; Bacolod-Iloilo, Liloan, Leyte-Lipata, Surigao; San Carlos, Negros Occidental-Toledo, Cebu and Dumaguete, Negros OrientalDapitan, Zamboanga del Norte.